CONTEXT AND KEY ELEMENTS OF THE PROPOSAL

• Groupe ADP¹, like the entire French aviation sector, is currently facing urgent and demanding challenges: successfully decarbonising the sector, tackling increased competition between hubs against a backdrop of regulatory and fiscal pressure in France, continuing to develop and support traffic growth, albeit more moderate, and increasing the attractiveness and distinctiveness of its hubs compared to its competitors.
• With an unprecedented €8.4 billion investment programme², Groupe ADP intends to play a key role in transforming the sector. Its core mission is to invest and grow with a long-term vision, while taking responsibility for preparing for the future and creating value for all.
• Groupe ADP is therefore proposing an industrial project based on an acceptable approach to development, one which is more efficient, more modular and more progressive, while also strengthening the competitiveness of the Paris airport market.
• The project is demanding, with targeted developments phased over time, requiring eight years to achieve full success. To enable the proposed investments to be made, Groupe ADP is proposing to enter into an Economic Regulation Agreement (ERA), covering the 2027-2034 period, to provide visibility and stability for all stakeholders.

As stipulated by law, in order to be economically viable, the project must provide for a fair return on the capital employed for the regulated scope, i.e., it must be profitable without excess return. Accordingly, the proposed 2027-2034 ERA aims for convergence between the regulated return on capital employed (regulated ROCE) and the weighted average cost of capital for this scope (regulated WACC) at 5.9% on average over the term of the Agreement.

This proposal is based on:

• a moderate traffic growth assumption of 1.6% per year on average;
• an unprecedented €8.4 billion investment plan² to create capacity for 18 million additional passengers, with a focus on progressive and modular developments;
• cost-saving measures within the regulated scope, with a savings plan target of around €130 million by 2034, to limit growth in costs to the harmonised consumer price index (CPI) of +1.2 point on average per year over the period (compared with a nominal trajectory estimated at CPI +2.4 points);
• a proposed average increase in airport charges of CPI +2.6 points for the period 2027-2034, proportional to the amount of the investment;
• additional measures to preserve value and share the risks inherent in a multi-year commitment.

“The industrial project that we are presenting today is an essential element in guaranteeing that Paris airports develop in a reasoned and sustainable manner. Our goal is to successfully transform Paris airports, decarbonise the sector and increase the competitiveness of the entire airport ecosystem in Paris. We see this as our responsibility and our core business.

To successfully carry out this transformation, the historic investments – averaging more than €1 billion a year over eight years – would be financed by a new economic regulation agreement. The draft Agreement presented seeks to strike the right balance between an unprecedented level of investment, the profitability of which is both guaranteed and capped by law, and fees applicable to airlines which, after the proposed increase, will remain in the lower range of fees applied by our competitors.

It aims to place us firmly in line with our competitors: thanks to our ability to create the conditions for growth and increased efficiency for airlines, and to improve service quality for passengers in a context that requires efficiency to be placed at the heart of development and a fair economic balance between airlines and Groupe ADP.

In addition to the Economic Regulation Agreement, in 2027, our future strategic plan will embody our long-term vision of value creation across all our activities, so that Groupe ADP can fully assume its role as an economic, social and regional driver of France’s influence.

Philippe Pascal,
Chairman and Chief Executive Officer of Groupe ADP.

This industrial project, designed to enhance the competitiveness of Paris airports, and the proposed ERA will strengthen Groupe ADP’s business model and safeguard its ability to:

• invest in non-regulated growth drivers (retail, miscellaneous real estate, international activities);
• distribute a dividend of 60% of the Group’s attributable net income, with a floor of €3 per share;
• maintain an unchanged credit rating³.

Source: Groupe ADP